Ethereum is entering one of the most important technical phases of the last several months. While much of the market remains focused on Bitcoin, the daily chart of ETH is beginning to show signs of structural weakness that deserve attention. The recent rejection from the May highs has completely changed the short term market structure, pushing price below key moving averages and back into a zone where buyers previously managed to defend the trend.
What makes the current situation particularly interesting is that Ethereum is now testing an area that could determine the direction of the next major move. A successful defense could trigger a recovery toward the upper range. Failure, however, could open the door to a much deeper correction toward levels not seen since the beginning of the year.
Compared to previous analyses published on Block2Learn, Ethereum has failed to maintain the momentum that was developing during the spring rally. Instead of attacking the weekly resistance zone above $2,500, sellers regained control and pushed the market back below several important technical levels. The question now is whether this is simply a pullback within a larger accumulation phase or the beginning of a more aggressive bearish leg.
🔍 Key Levels and Current Structure
The daily chart clearly shows a deterioration in market structure.
Ethereum spent several weeks trading inside an ascending channel, gradually building higher lows while attempting to recover from the February collapse. That recovery phase generated optimism across the market, but the recent breakdown below the lower trendline of the channel has significantly weakened the bullish case.
The chart now shows a confirmed loss of trend support, followed by increasing selling pressure as price moved below the short term moving averages.
📊 Key Levels:
🔴 Resistance Levels:
• $1,920
• $2,000
• $2,086 (EMA 26)
• $2,126 Volume Profile resistance
• $2,400 to $2,500 major supply zone
🟢 Support Levels:
• $1,800 psychological support
• $1,750 high volume support area
• $1,600 major structural support
• $1,540 historical demand zone
The most important observation is that Ethereum is currently trading below both the EMA 12 and EMA 26.
📈 Moving Averages
EMA 12: $2,001
EMA 26: $2,086
EMA 200: $2,482
The EMA 12 recently crossed below the EMA 26, confirming bearish momentum. This crossover often acts as an early warning signal that buyers are losing control of the trend.
Even more concerning is the distance between current price and the EMA 200.
The EMA 200 remains far above the market near $2,482, highlighting that Ethereum has failed to recover its long term bullish structure. Until ETH can reclaim this level, every rally remains vulnerable to selling pressure.
📊 Market Liquidity
The Volume Profile displayed on the chart reveals a significant concentration of liquidity between $1,950 and $2,150.
This area acted as support for several months but has now transformed into resistance.
Markets frequently revisit these high volume nodes after a breakdown. If Ethereum attempts a recovery, this zone is likely where sellers could reappear aggressively.
Meanwhile, below current price there is relatively less historical support until the $1,750 area.
This creates the possibility of accelerated downside movement if sellers continue to dominate.
📉 Momentum Indicators
RSI currently sits around 25.
This places Ethereum in oversold territory on the daily timeframe.
While oversold conditions often lead to temporary relief rallies, they do not automatically signal a bottom.
Strong downtrends can keep RSI oversold for extended periods.
The MACD continues to show bearish momentum.
The histogram remains negative and both MACD lines continue trending downward, suggesting that selling pressure has not yet been fully exhausted.
🚀 Bullish Scenario
The bullish case is not invalidated, but it requires buyers to react quickly.
The first positive signal would be a strong recovery back above the $1,920 area.
Such a move would indicate that the current breakdown may have been an overextension rather than the start of a major collapse.
For bulls to regain meaningful control, Ethereum must reclaim the psychological $2,000 level and then push back above the EMA 26 near $2,086.
Only after reclaiming these levels would the market begin rebuilding a constructive structure.
🎯 Long Entry:
Aggressive traders may look for confirmation above $1,920.
Conservative traders should wait for a daily close above $2,000 and ideally above the EMA 26.
📍 Stop Loss:
Below $1,750.
🎯 Targets:
Target 1: $2,000
Target 2: $2,126
Target 3: $2,400
Target 4: $2,500
Target 5: $2,800
A recovery toward the $2,400 to $2,500 region would represent a full retest of the EMA 200 and the upper liquidity zone visible on the chart.
📊 Probability: 40%
Although RSI is oversold and could support a bounce, the loss of channel support and bearish moving average alignment currently reduce the probability of an immediate bullish reversal.
📉 Bearish Scenario
The bearish scenario currently remains the dominant technical path.
The breakdown from the ascending channel has already occurred.
Price is trading below the major short term moving averages.
Momentum indicators remain negative.
Volume has increased during the decline, suggesting that sellers are actively participating rather than simply benefiting from a lack of buyers.
If Ethereum fails to recover $1,920 and instead continues trading below $1,800, the probability of a deeper correction increases significantly.
🔻 Short Entry:
Breakdown confirmation below $1,800.
📍 Stop Loss:
Recovery above $1,920.
🔻 Targets:
Target 1: $1,750
Target 2: $1,600
Target 3: $1,540
Target 4: $1,400
The $1,600 area deserves particular attention.
This zone acted as a major accumulation region following the February crash and could once again attract institutional demand.
A loss of $1,600 would likely trigger a substantial increase in volatility and liquidations across the broader altcoin market.
📊 Probability: 60%
The current structure favors sellers. Until Ethereum recovers key resistance levels, bearish continuation remains the higher probability outcome.
📌 Best Strategy: Wait for Confirmation
One of the biggest mistakes traders make during periods like this is confusing oversold conditions with confirmed reversals.
Ethereum certainly appears oversold.
However, oversold markets can become even more oversold.
The chart currently shows a market that has lost trend support, lost moving average support, and remains under heavy resistance from the volume profile.
This does not mean Ethereum cannot bounce.
It means that any bounce must first prove itself before being trusted.
The most important level to monitor in the coming days remains the $1,920 to $2,000 area.
A recovery above this zone would begin rebuilding confidence.
Failure to reclaim it would keep downside pressure intact.
From a broader perspective, Ethereum is approaching a decision point that could influence the entire altcoin market. Historically, sustained weakness in ETH often translates into increased pressure across mid cap and small cap cryptocurrencies.
This is precisely why traders should focus less on predicting the next move and more on observing how price reacts around critical support and resistance levels.
The market is providing a clear framework. The next major trend will likely emerge from the battle currently taking place around the $1,800 area.
🧐 What to Watch in the Coming Days?
📈 Can Ethereum reclaim $1,920 and return above $2,000?
💰 Does volume increase during recovery attempts or only during selloffs?
🔄 Can buyers defend the $1,750 support area if current levels fail?
📊 Will RSI divergence begin to appear as price approaches lower supports?
The answers to these questions will likely determine whether Ethereum is preparing for a recovery phase or a deeper structural correction.
Source of the Chart: TradingView
📜 Disclaimer
This analysis is for informational and educational purposes only and should not be considered financial advice. Trading and investing in cryptocurrencies involve a high level of risk, and past performance is not indicative of future results. Always conduct your own research and consult with a professional financial advisor before making any investment decisions. The information provided here reflects market conditions at the time of writing and may change without notice. Neither the author nor this platform is responsible for any financial losses incurred as a result of trading decisions based on this analysis.
This article is provided solely for informational and educational purposes and does not constitute financial or investment advice, a recommendation, or an offer or solicitation to buy or sell any financial instrument or digital asset. See our Financial Disclaimer.
This article was generated with the support of AI and reviewed by the Editorial Team. For more information, see our Terms of Service.
